Yuan edges lower on PBOC guidance, still stuck in narrow range

By Lu Jianxin and Pete Sweeney SHANGHAI, July 30 (Reuters) - The Chinese yuan edged loweragainst the dollar on Tuesday after the central bank set aslightly weaker midpoint in the latest sign that the governmentwants to keep the exchange rage stable. Spot yuan changed hands at 6.1350 per dollar atmidday, 0.04 percent lower than Monday's close of 6.1325, afterthe People's Bank of China (PBOC) set its official midpoint at6.1770, or 0.1 percent weaker than Monday's 6.1705. "Aimed at guiding the yuan slightly lower after thecurrency's recent rise, today's midpoint is the latest sign thatthe PBOC may want to keep it largely in a range of 6.13/14 fornow," said a dealer at a Chinese commercial bank in Shanghai. "The government appears to take a wait-and-see attitudetowards the impact of slowing economic growth on the exchangerate," he said. "It thus wants to keep the yuan relativelystable for now." The yuan has largely moved sideways since early June as theworld's second-largest economy expanded at an annual rate of 7.5percent in the second quarter, down from 7.7 percent in thefirst quarter. Economists now widely expect growth will barely hit thegovernment's target of 7.5 percent for all 2003, still high byglobal standards but the lowest growth in 23 years for China.